Insurance Glossary

ACORD 25 form: This is an industry standard form used to create a certificate of insurance (COI).

Actual Cash Value (ACV): This is the method of determining the value of property that has been damaged. It is based on the cost to repair or replace the property, less depreciation.

Additional Insured: This is another person or business who is not the named insured but is listed on your insurance policy. An additional insured also can file claims of their own under the policy. Additional insureds can be listed individually or on a blanket basis. For example, a construction company with this type of endorsement could extend coverage under their policy to contractors and subcontractors.

Aggregate Limit: This is the maximum amount an insurer will pay for covered losses over a specified period of time.

Appraisal: An appraisal is an assessment of a property’s value by an independent professional.

Arbitration: An alternative to going to court where a neutral third-party is used to settle a dispute. In insurance, the dispute is between an insurer and a policyholder.

Bodily Injury: This can include physical injury, sickness, or disease.

Certificate Holders: This is a person or entity who has a certificate of insurance (COI) in their possession. That could be the policyholder, or a person or entity who has asked the policyholder for a COI to prove the policyholder has insurance. Being a certificate holder does not necessarily mean you are covered by the policy.

Certificate of Insurance (COI) Also known as: ACORD 25 form: This is a document your insurer provides to prove you have an insurance policy. It summarizes important information about the policy, such as types and limits of your coverage, your insurance provider, policy number, named insured(s), and coverage start and end dates.

Claim: A demand for your insurance company to pay for a loss.

Claimant: The person or business that makes a claim to the insured person or their insurance company.

Claims-Made Insurance Policy: This type of policy covers claims that are made against the insured during the policy period. Claims made after the policy ends would not be covered.

Commercial Auto Insurance: This type of policy covers vehicles owned by a business and their use for business purposes.

Commercial Property Insurance: This insurance covers your building and other business property from loss or damage due to a fire, storm, or other natural disaster. It generally doesn’t not cover damage from earthquakes or floods.

Endorsement: An insurance policy form that changes or adds to the provisions included in one or more other forms used to create the policy. An Additional Insured is an example of an endorsement.

General Liability Insurance: This business insurance covers costs from third-party accidents, third-party bodily injury, and third-party property damage that results from your products, services, or business operations. It is sometimes called commercial general liability (CGL) insurance.

Loss Payable Provision: This is an endorsement where an insurer makes a claim payment to a third party for a loss instead of the named insured or beneficiary. It’s often included when more than one person has a financial interest in property or equipment. For example, the bank who financed the purchase of your company van could be added to a loss payable provision.

Loss Payee: The loss payee is the person who is entitled to payment when an insurance claim is settled. In some cases, that’s the policyholder. Loss payees are included in a Loss Payable Provision.

Primary and Noncontributory (PNC): ‘Primary’ means your insurance policy will respond to a covered claim first before another policy that may cover the same claim. ‘Non-contributory’ means that the policy is required to respond to a covered claim without requesting that the other policy contribute to paying for that claim. This endorsement can be added when an additional insured is covered under the policy.

Rider: This is also known as an Endorsement (see definition above)

Waiver of Subrogation (WOS): Subrogation is a right your insurer may have under an insurance policy to recoup costs from a negligent third-party on a claim paid under your insurance policy. For example, a subcontractor on your project damages one of your equipment storage sheds. Your insurer pays you for the claim and then pursues the subcontractor’s insurance company to recover the money.     A “waiver of subrogation” is an endorsement on an insurance policy that prevents your insurer from recovering money it paid for a loss from a negligent third-party.